Friday, January 9, 2009

Jagdish Bhagwati sounds alarm on Obama Trade Policy!!

I don't know why I have been so glued to the FT today, but today, the online edition seemed a little more meatier than the last few month's--probably due to the end of the year and the American elections, which solely dominated the news.

Now the FT has gotten back to form and this latest article in the comment section, by renown economist Jagdish Bhagwati of Columbia University, has sent out an official sound of alarm on Obama and his trade ambitions--or lack there of.
See article here:

If you would remember, I posted an alarm on Obama Trade last year November. One of the first posts of this blog. Well, I guess Mr. Bhagwati is making it a serious concern.
See blog entry here:

We agree on agricultural subsidies and US labour unions and farm unions, having the back stop of the US government now led by Democrats.

There are two critical issues Mr. Bhagwati expounds upon now as a result of all he has witnessed. The first is the subsidies that the auto-bail out ended up in. Mr. Obama has supported the bail out and so do many of the democrats around him. This would be a subsidy in no other way and harms the multi-lateral trading system in regards to automobiles, unfairly giving US car companies a way to produce cars cheaper than their foreign counterparts and then, as he puts it, enacting countervailing duties, in effect, on automobile imports to the US as a consequence.

I have mentioned the auto-mobile subsidy before on another article here on this blog, as a point to note in regards to trade protection to the greater global economy amidst this global economic crisis. It is a subsidy and everyone knows it. It's been done, however.

Second point raised by Bhagwati, is the oncoming proliferation in bi-lateral agreements by the USofA. This was mentioned as a direct move forward by Obama in my article on his positions on trade mentioned in this blog entry. However, a critical issue Bhagwati raised is the call for "fair" trade by poorer developing countries, in effect, enacting US standard trade pacts for trade to the US and as a result, moving away from the generalized multi-lateral system where fair trade, is not a letter of the law WTO regulation.

As said, from the tone of the campaign stump, Obama, is not keen on this current global trading system and the US position within it.

Changes will come and you can compare my former blog entry, to that of Bhagwati, which gives a more up to the minute analysis, to how it has progressed and what to look out for and how to address it for a more free trading system.
Post a Comment